Written by: Blockchain Knight
On Monday, White House officials met with leaders of the crypto industry and major banking groups in an attempt to ease a key regulatory dispute that has slowed progress on long-awaited legislation to structure the crypto market, the CLARITY Act.
The meeting focused on one of the most contentious issues hindering the passage of the bill: whether stablecoin issuers and related third parties should be allowed to offer stablecoin holding yields or rewards.
This discussion comes against the backdrop of ongoing lobbying by the banking industry, which has been urging lawmakers to include provisions in the Clarity Act that would prohibit issuers and third parties from offering rewards pegged to stablecoins.
However, the crypto industry believes that such restrictions will tilt the competitive landscape toward traditional financial institutions, which are increasingly concerned about competition from digital asset companies.
Eleanor Terrett of Crypto In America shared more details about the meeting, citing sources familiar with the matter.
According to Terrett, the meeting lasted two hours and was lively, with participants exchanging balanced views on the risks and potential benefits of stablecoin yields.
This conference brought together numerous stakeholders, including representatives from major banking institutions such as the American Bankers Association, the Banking Policy Institute, the Financial Services Forum, the Consumer Bankers Association, and the American Independent Community Bankers Association.
Attendees also included representatives from Fidelity Investments, PayPal, Paradigm, SoFi, Coinbase, Paxos, Crypto.com, Kraken, Ripple, and Tether, as well as advocacy organizations such as the Blockchain Association, the Digital Chamber of Commerce, and the Crypto Council.
Other participants include Stripe, Galaxy Digital, Multicoin, Circle, and Cantor.
Following the meeting, Cody Carbone, president and head of crypto policy at the Chamber of Digital Commerce, said the talks were an important step forward.
Cody stated that this meeting "is exactly the kind of progress needed to address one of the biggest obstacles to progress in market structure legislation."
Patrick Witt, executive director of the White House Crypto Council, echoed this sentiment, thanking those from the cryptocurrency and banking industries for their participation and calling it a fact-based, solution-oriented dialogue.
Patrick noted that policymakers and industry leaders have made progress in recent months on several policy challenges that were once considered insurmountable, and expressed confidence that the stablecoin rewards issue can also be resolved through continued dialogue.
The participating banking groups also issued a joint statement reiterating their respective positions. They emphasized that any final legislation should continue to support local lending to households and micro, small and medium-sized enterprises (MSMEs), maintain the stability of the financial system, and promote sustainable economic growth.
Despite apparent progress, the legislative process remains uncertain. It remains unclear whether the Senate Banking Committee will follow the example of the Senate committee.
The committee approved the relevant portions of the CLARITY Act during its routine review last Thursday, clearing a significant procedural hurdle.
